FREEPORT — A return of winter temperatures last week brought biting winds and sub-freezing temperatures to Maine, but inside the new Handcraft building at the Merriconeag Waldorf School here, it was cozy and calm.

Warmth was coming from two electric heaters, but not the familiar kind that send current through wires. Each unit circulates a refrigerant that was absorbing heat present in the outside air. The transferred heat was pumped into a wall-mounted evaporator, which was blowing quietly and warming the room to 65 degrees.

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Unlike typical electric baseboards, this technology moves heat rather than creates it. Overall efficiency is greater than 300 percent, and operating costs are a fraction of electric resistance heat. This makes heat pumps much cheaper to run than oil or propane boilers, and eliminates venting, chimneys and annual maintenance.

A typical system costs between $3,500 and $10,000 installed, said Gerry Chasse, president and chief operating officer of Bangor Hydro-Electric Co. and Maine Public Service Co. If the system is used to offset oil heat, it could repay the investment in less than five years.

As oil prices have risen, a modern heat pump can warm living space at the equivalent price of $1.50 a gallon for oil, says Pat Coon, managing partner at ReVision Heat in Portland, which installs alternative heating equipment. Heating oil was selling for an average of $3.86 a gallon statewide last month, according to the Maine Office of Energy Independence and Security, which tracks statewide prices.

The administration of Gov. Paul LePage is bullish on efficient electric heat. It says that installing thousands of heat pumps and electric storage heaters, which charge thermal bricks with cheaper, off-peak power, is a key solution to Maine’s dependence on expensive fuel oil. These systems are popular in other states and in Canada, but are unusual in Maine, where oil has been the dominant heating fuel.

But can efficient electric heat really reduce the overall energy costs for Maine homes and small businesses?

Will the equipment, some of it quite new, be reliable and effective?

How would the region’s electric grid handle the demand for more power, especially at times of high use?

These and other questions will be studied in pilot programs that are expected to be introduced later this year by Maine’s electric utilities and Efficiency Maine Trust, which coordinates conservation efforts for the state. Also to be determined: Will Mainers embrace these technologies, and are they willing to spend money to switch to them?

Advocates say efficient electric heat may offer additional benefits. Thermal storage heaters, for example, can support wind and tidal power by providing a way to bank renewable energy and release it as needed. Storage heat also helps pay the fixed cost of transmission lines by using them at night, when there’s excess capacity.

The governor’s plan has attracted some skeptics and outright critics, however.

Environmental groups say the state’s first priority should be weatherizing homes, because that’s the most effective way to cut energy bills. They also caution that heat pumps, which also function as air conditioners in summer, could speed the need for new power plants.

The governor’s plan also irritates companies that sell oil, propane and wood fuels. They complain that the state is promoting programs that benefit their competitors.

These and other concerns led lawmakers to modify a full-blown effort by LePage to introduce a large, ratepayer-financed electric heat conversion and loan plan. As a compromise, a pilot program is pending in which utilities can offer heat pumps or electric thermal storage units to up to 500 homes and small businesses.

The program must be approved by the Maine Public Utilities Commission. Power companies can enroll customers until the end of 2013, and must measure and report on various impacts by mid-November 2013.

It’s too early to know the details of these programs, but ratepayer money won’t be used to finance it. Consumers will have to pay for the systems themselves. Utilities, however, can set up on-bill financing, and may offer loans or work with commercial lenders. They also hope to increase revenue through electricity sales.

Bangor Hydro-Electric Co. and Maine Public Service Co. are likely to be strong promoters of the program. Chasse, the utilities’ executive, says spending money on heat pumps is a more cost-effective form of efficiency than spending on conservation. Maine’s electric usage rate is very low, he points out; only 10 percent of the energy used in the state is in the form of electricity. Meanwhile, oil heat is the highest per capita in the country.

“This is simply a case of finding the low-hanging fruit when it comes to energy efficiency, and heating happens to be where it’s at,” he told lawmakers at a public hearing on LePage’s proposal.

Heat pumps have two main designs. They can capture warmth from groundwater, in the form of geothermal energy. Geothermal heat pumps are very efficient year round, but they’re expensive and tend to be used in new construction.

Because few homes are being built in Maine, Chasse favors a new generation of air-type heat pumps, like the ones at Merriconeag. They are designed to work in cold climates and can warm an existing home today for half the cost of oil, Chasse said.

He figures air-type heat pumps could handle more than 80 percent of a typical home’s heat needs. But because they’re less efficient in very cold weather, the heaters will be promoted as a supplement to existing oil burners, which could be turned on during subzero temperatures.

That combination, and the large cost savings, make heat pumps attractive for low-income households, Chasse said. The quick payback could make a case for installing them in homes that qualify for low-income heating assistance, rather than channeling federal money to buy oil each year.

“It’s a real solution to our LIHEAP dependency,” he said.

That notion will be tested with a $1 million federal grant by Efficiency Maine Trust that targets alternative heating systems in low-income homes. The trust wants to learn how much energy is saved and at what cost, and what challenges customers face in using this equipment.

“The results will help us design future programs to help Mainers get better access to low-cost heating options,” according to Michael Stoddard, executive director of Efficiency Maine.

SCHOOL PLEASED WITH RESULTS

At Merriconeag, the heat pump’s performance during its first heating season is of great interest to Will Hight, the school’s caretaker.

He has been monitoring comfort levels in the 2,570-square-foot building and is pleased. A couple of February nights saw temperatures fall below zero, but the two electric-resistance heaters installed for backup and set at 52 degrees didn’t turn on.

Hight also has been watching the building’s electric bill, which averaged $300 a month this winter. Monthly consumption averages 2,200 kilowatt hours, and that includes lighting.

The building’s southern exposure, superinsulation and high-efficiency lighting reduce demand. And at a total cost of $10,000, the heat pumps were cheaper than a natural gas boiler, which was another option when the building was being designed.

“I got a healthy, safe, warm environment that functions efficiently,” he said. “And I never hear a grumble.”

CONCERNS: COST, RISE IN PEAK LOAD

The school didn’t consider electric thermal storage, but it will be an option in the upcoming utility pilot programs. The heating units contain ceramic bricks in an insulated cabinet. The bricks are warmed overnight using off-peak electricity that’s offered at a lower rate.

Storage heat is getting a trial run this winter in central Maine, where a couple dozen have been installed. Madison Electric Works, the local power company, has teamed up with Biddeford-based Thermal Energy Storage of Maine to make them available. A mid-sized unit, which could supplement an oil furnace, costs roughly $3,000 and delivers heat at a price equivalent to $2.20 a gallon for oil. Local lenders are offering reduced-rate loans for the program.

Storage heat could become widely available under a plan likely to be proposed by Central Maine Power. CMP favors storage heat over heat pumps, said John Carroll, CMP spokesman.

“It potentially makes good use of renewable resources, and good use of the excess capacity in the transmission and distribution system,” he said. “We’re not anxious to see technology that increases peak load.”

Environmental groups also share a concern about increasing electricity use.

“The impact on transmission and distribution prices overall need to be considered if Maine puts more pressure on the grid in the summer,” Beth Nagusky, Maine director of Environment Northeast, said in her public testimony before lawmakers.

Dylan Voorhees, clean energy director at the Natural Resources Council of Maine, takes issue with the idea that heat pumps are more cost-effective than weatherization. A home insulation program run last year through Efficiency Maine cut heating demand by an average of 35 percent, he said, at an oil-cost equivalent of $1.15 a gallon.

A key question for the electric heat pilot program, Voorhees said, is what does it cost, overall, to save a gallon of oil?

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